Company Name: YANGZIJIANG SHIPBLDG HLDGS LTD
| Research House: Nomura | Price Call: SELL | Target Price: 0.74 |
Nomura cut its rating on Yangzijiang Shipbuilding (Holdings) to reduce from neutral, and decreased its target price to $0.74 from $0.85, citing weak pricing and lacklustre demand for new orders.
“Due to falling new orders and shrinking margins, revenues and profit from the core shipbuilding segment are expected to shrink. However, earnings will continue to be held up by non-core investment income and other gains which are coming in higher than expected,” the broker said.
It said recent orders won by the shipbuilder were done at an average price of US$28 million ($35.2 million), substantially lower than the US$35 million a similar order would have fetched previously.
Yangzijiang's shares were up 0.4% at $1.26 and have gained 38% so far this year.
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